If there's one thing someone with the flu and someone with cancer
have in common, it's that they both are probably not fans of the
current healthcare system. Even to those lucky enough to have
decent health insurance, a simple doctor's visit can turn into a
mess of paperwork, deductibles, copays and wrangling with the
insurance company. And that's not even counting the monumental
bills that can quickly stack up for even the simplest conditions.
So much so that 1.5 million Americans declare bankruptcy as
the result of medical bills each year. And three quarters of that
1.5 million have health insurance.

In 2010, Congress set out to address this growing financial and
humanitarian burden by passing the Affordable Care Act. Depending
on your view of the topic, the law is either a messianic godsend
or a socialist plot, but no one disagrees that providing
affordable healthcare to the millions of uninsured will bring a
hefty price tag. Some claim it will bankrupt the country, while
the
Congressional Budget Office estimates that it will pay for itself. Along the way, however, we
will all have a delightful front row seat to all sorts of
unintended, unforeseen and unpredicted costs. Costs like:

Deductible Limits

If you're young and just starting at your first job out of
college, getting your own health insurance feels like a milestone
of adulthood. Even when most of us were paying our own rent and
bills, we were still on our parents' healthcare plans. Finally,
you can go to the doctor and not have to pay half a month's rent.
We all know that sinking feeling when receiving the first
unexpectedly large bill because you haven't met your deductible
yet.

Deductibles, or the amount you need to pay before the insurance
company will start covering the lion's share of your bills, are
there to give the insurers a buffer against payouts to customers.
They are essentially running the odds that you only need a
checkup, a flu shot and maybe a pair of glasses each year (which
is why these things are usually covered in some way) . Depending
on your plan, the broken leg, expensive medication, or sudden
injury will all fly under the deductible each year. It's a major
way for insurers to save money while still providing coverage if
something bankruptcy-sized comes along.

The hidden cost here is that the Affordable Care Act limits
deductibles to $2000 a year. As David Doyle, CEO of CRT Medical
Systems points out, that's going to cause some problems:

"CRT saves a substantial amount of money by having a high
deductible so it can offer better coverage...We calculated that
we would save money by forcing employees to go to [Federal and
State Healthcare] Exchanges for their coverage”

Too high of a deductible means it becomes cheaper for many
business to pay the fine for not providing coverage, forcing
employees to buy individually on the new state and federal
exchanges. The implications for businesses―not to mention the
federal budget―are impossible to nail down, but it is not likely
to be cheap.

The Long, Bitter Fight

The Affordable Care Act has stirred up one of the most rancorous
debates in recent political history. Countless hours have been
spent challenging the law in court, and the House of
Representatives has repeatedly voted to appeal the law. All of
these challenges have been stymied by a Democratic president and
Senate, as well as a last minute change of heart from Chief Justice John Roberts.

The problem is, all of that wrangling, arguing, and
lawsuit-filing costs money. It all adds up to the tune of
roughly $50 million for the never-ending
spat—much of which is little more than political theater.

The real cost, however, is what economists refer to as “opportunity cost”, or basically “the cost of
not doing something”. In all that time Congress could
have been passing real laws instead of passing repeals that would
inevitably die in the Senate. They could have been addressing our
rapidly approaching fiscal cliff, our crumbling infrastructure,
our horribly designed corporate tax structure or one of a million
other issues that would actually have an impact. Or they could
have been actually talking about the details of the healthcare
system, attempting to hash out compromises amenable to both
sides. Instead Democrats and Republicans both took their ball and
went into the corner to play by themselves, instead of dealing
with issues such as education, immigration or the expiration of
the Bush tax cuts which exact a real toll on the average citizen.

Student Health Plans

College is a wonderful haven away from the pressures of the real
world. Students are free to expand their minds, think freely and
critically, and generally focus on little more than learning and
their rapidly ballooning debt. Part of this bubble comes from the
fact that many colleges and universities offer their students a
school-sanctioned health insurance plan. The school is able to
negotiate better terms much like an employer, and students get an
affordable insurance plan. Everyone wins.

Under the Affordable Care Act, however, many colleges and
universities say they will no longer be able to provide health insurance
to students. In an era where student debt is clocking in at
over a trillion dollars and continuing a
meteoric rise, the cost of health insurance on students is likely
to compound an already titanic problem. Those students, like the
employee whose company drops coverage, will be forced to go to
the federal and state healthcare exchanges.

Deadweight Loss from Taxation

Everyone hates taxes, and even between Conservatives and
Liberals, it's generally agreed that taxes are a bad thing to be
avoided. Especially in our current economy, taxes put a burden on
companies and individuals and can generally depress economic
output. To pay for the massive expansion of coverage to millions
of Americans, the Affordable Care Act comes with its own heaping
spoonful of tax increases in an attempt to make the entire
bill deficit-neutral, though none the more palatable to fiscal
conservatives.

Much like opportunity cost, one of the biggest costs associated
with taxes is not the direct dollar amount, but the extent to
which they depress further economic output, known as “Deadweight loss”. This is the cost of the
company that doesn't expand because they can't afford the tax
bill, the extra employee that isn't hired because the payroll tax
contributions would put them over-budget. It's a fraught and
complicated estimate (which is why it's often not reported) but
it is nonetheless a very real implication of many government
interventions.

Put simply, the Affordable Care Act will make doing business in
healthcare that much more expensive for many of the big players.
The limits on non-care spending for insurance companies and the
tax on medical devices may be better for consumers and the
governments bottom line, but the impacts will echo through the
industry. The taxes will not necessarily put insurance companies
or device manufacturers out of business (after all, they're about
to see a huge jump in demand), but it's important to keep in mind
that the true cost is not always bottom line.

Hidden Healthcare

If you've ever gone without insurance, you know how many
lingering health issues pile up. That strange tinge in your side
may be a muscle cramp or it may be cancer -- but if you don't
have insurance, you're most certainly not going to pay out of
pocket for a CT scan. Likewise, if your aging parent desperately
needs extra care, you take precious time off work and school to
do so because you can't afford professional care. Even if you do
have insurance, it might not cover what ails you, or the
deductible is too high, or you're worried about premium
increases.

All of this adds up to one of the biggest question marks about
the cost of the Affordable Care Act: how much healthcare are
people not consuming, and how much will they consume
once everything is suddenly covered and affordable? One estimate
puts the price tag as high as $363 billion, or roughly a 50%
increase to the current estimated cost of the Act, but the real
cost is nearly impossible to put a good number to.

Whether all of the known and unknown costs are worth it likely
depends on your political leanings. But amid all the angry town
halls, court cases and political theater, sober discussions about
the true cost and implications of this massive restructuring of a
system so essential and fundamental to the average citizen have
been few and far between. Hopefully, Obamacare works out for the
best, some suitable compromise is worked out, or private industry
is given free reign and figures out how to insure people at
affordable rates. Whatever the eventual outcome, in the
preparation perhaps we should remember the old English aphorism to “Hope for the best,
but prepare for the worst”.